Greg Gretsch is not only an investor in Strava, a fitness startup, he’s an avid user of the startup’s technology, a GPS-enabled application that lets riders record their rides, track their performance, compete with friends and find new routes and climbs.
Is he crazy to invest in his hobby?
Gretsch, managing director of Sigma Partners, recalls that when he joined the firm in 2000, a colleague quietly pulled him aside and gave him a piece of advice.
“If you ever have the urge to invest in a sailing company, just buy the sailboat. It’ll be a lot cheaper for everyone,” the partner warned him.
Gretsch (pictured) heeded that wisdom for more than 10 years. Then he discovered Strava, a company started by the founders of Kana Communications that was intended to be a lifestyle business catering to the hardcore cycling community, of which Gretsch himself was a member. But after a year of using Strava, Gretsch—who at one point cycled as many as 250 miles per week—had an epiphany.
“I realized that Strava had the potential to become the social network for athletes, just like Facebook is the network for friends and LinkedIn is the network for professionals,” he says.
Strava recently raised $3.5 million from Sigma to expand the application to runners and other fitness buffs, not just cyclists. The company is part of a wave of venture-backed fitness and personal health companies that’s gaining momentum.
VCs active in fitness and personal health insist the category is more attractive than ever.
“This will be a huge area over the next five years,” Tim Chang, a partner at Norwest Venture Partners, tells Venture Capital Journal. “It will be the next big buzzword category, like cloud computing is today.”
Norwest is a backer of Basis, which provides a watch-like device that measures heart rate and other vital signs of the wearer. It raised $9 million from Norwest and DCM.
Other recently funded startups include:
- Fitbit, which makes a wearable device that tracks a user’s daily activity and movements. The company raised $8 million in a second round of funding from True Ventures and the Foundry Group.
- Endomondo, which provides an application that turns fitness into a game by giving users the chance to compete with friends and earn points for their fitness achievements. The company raised $800,000 in seed financing.
- FitnessKeeper, which develops a mobile fitness application that raised $1.1 million from O’Reilly AlphaTech Ventures.
- MapMyFITNESS, which makes online and mobile fitness tracking applications. It raised $5 million in first-round funding from Austin Ventures.
Subscribers of VCJ can read the full story about the trend of investing in fitness startups by clicking here. The story also includes a sidebar of how some VCs, including Bryce Roberts, a managing director at O’Reilly AlphaTech Ventures, are not just investors but enthusiasts of the sites they back.
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